Will McDonald’s ‘lothario’ have to hand back his €35m takeaway?
Bosses bid to recoup payout after claim of flings with THREE junior employees
‘Explicit photos and videos’
MCDONALD’S sued its British former boss yesterday, claiming that he covered up flings with three junior employees before he was fired.
Steve Easterbrook, 53, walked away from the fast food giant eight months ago with a settlement worth more than €35million, which the company now wants back.
At the time, Mr Easterbook admitted he showed ‘poor judgment’ by having an affair with a colleague. But McDonald’s took his word that the short relationship, lasting just a few weeks, was consensual, and not physical, consisting instead of text messages and videos, known as sexting.
However, in legal papers filed yesterday in the US, McDonald’s says that following a tip-off last month, it has since discovered he covered up sexual relationships with three other employees in the year before he was sacked.
Not only did he lie to investigators and destroy evidence, but the Watfordborn chief executive gave McDonald’s share options worth hundreds of thousands of dollars to one of his secret lovers, the firm claims. The whistleblower, named only as Employee-2 in the court papers, is one of those with whom Mr Easterbrook, a career company man who was appointed CEO in March 2015, had relations.
In the papers, the firm says: ‘An internal investigation into this allegation discovered photographic evidence that, while he was CEO, Easterbrook had engaged in a physical sexual relationship not only with Employee-2, but also with two other company employees in the year before his termination.’
McDonald’s claims that its investigators found ‘dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees, that Easterbrook had sent as attachments to messages from his company email account to his personal email account’. It adds: ‘The date and time stamps on the photos of the three company employees show the photos were all taken in late 2018 or early 2019.
‘The photos are indisputable evidence that Easterbrook repeatedly violated the company’s prohibition of any kind of intimate relationship between employees in a direct or indirect reporting relationship.
‘They are indisputable evidence that Easterbrook lied during the investigation into his behaviour in October 2019, when independent outside counsel expressly asked him if he had ever engaged in a physical sexual relationship with any company employee.’
The emails, pictures and videos were not found during the investigation last year into Mr Easterbrook’s admitted liaison, which he told the company was a one-off.
According to the lawsuit, the divorced father-of-three tried to cover his tracks but did not realise that deleting the incriminating evidence from his company mobile phone failed to remove them from the firm’s computer servers.
Not knowing the alleged true extent of his behaviour, McDonald’s in November decided he had broken its rules by engaging in an ‘inappropriate relationship with a subordinate’ and shown such poor judgment he could no longer continue as chief executive.
However, based on what he said, the company approved a separation agreement ‘without cause’ that allowed Mr Easterbrook to leave with what it called ‘substantial severance benefits’.
He was allowed to keep some €35million in share-based benefits, according to Equilar, a company which tracks executive compensation, and also collected half a year’s salary, worth another €580,000.
McDonald’s, in the court papers, says: ‘The board would not have agreed to the terms of the separation agreement had it then been aware of Easterbrook’s physical sexual relationships with three McDonald’s employees, his approval of a discretionary stock grant for Employee-2 while they were in a sexual relationship, and the falsity of his representation to outside counsel that he had never engaged in a physical sexual relationship with a company employee.
‘And had Easterbrook not deleted evidence from his phone and lied to the board and its investigators in October 2019, the board would have known the full record of his conduct when it considered the terms of his separation.’
Mr Easterbrook was unavailable for comment and has not yet filed his defence. Earlier this year, The Wall Street Journal claimed he had frequently flirted with female staff after indulging in an existing culture of after-work hard drinking among employees at the McDonald’s Chicago HQ, close to where Mr Easterbrook has a luxury flat. Staff said they were alarmed that, even as CEO, Mr Easterbrook continued to fraternise with underlings in local bars into the early hours.